Which of the Following Items Should Not Be Included in the Cost

question 83

Multiple Choice

Which of the following items should not be included in the cost of ending inventory?

• A) purchased units in transit, shipped FOB shipping point
• B) purchased units in transit, shipped FOB destination
• C) units on hand in the warehouse
• D) sold units in transit, not invoiced, and shipped FOB destination

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Definitions:

Segment Margin

The amount of profit or loss generated by a specific segment of a business, calculated by deducting the direct and indirect costs associated with that segment from its revenues.

Segmented Income Statement

A financial statement that separates the results of different business units, products, or segments to analyze each segment's profitability.

Contribution Format

An income statement format that separates fixed and variable costs, highlighting the contribution margin.

East Segment

A division or geographical area of a business focused on the eastern region, often used in reporting or segmenting operations.